According to the U.S. Energy Department, it has changed its mind on financing construction of a new "green" coal-fired power plant in Illinois.

The New York Times has reported that the project, abandoned last week, would have turned coal into a hydrocarbon gas, filtered out the carbon and burned the hydrogen.

The newspaper also reported that instead, the government says it will retrofit an existing plant in Illinois to be fed pure oxygen while it burns coal, creating exhaust gas that is almost pure carbon dioxide, which will then be pumped and stored underground.

It has also been reported that the change in plans is the latest twist in the saga of FutureGen, a federally supported effort to find the best way to convert coal to a gas, removing pollutants and then burning the gas for power.

FutureGen has been repeatedly delayed over arguments over choosing a site and by ballooning costs.

Matt Rogers, a senior adviser to Energy Secretary Steven Chu, said that although the retrofit involves an old oil-burning plant, not one using coal, the approach could show the way to converting dozens of old coal plants across the country.

Rogers further said that if successful, this would allow the coal industry "to remain competitive on a global basis."

The gasification strategy no longer made sense because it was no longer the best or newest option, said Sen. Richard J. Durbin, D-Ill., a long-time supporter of the canceled project.

Referring to the many delays, he said, "That's happens when you wait six years." (With Inputs from Agencies)